Obama new financial literacy push: John Rogers helms advisory panel

WASHINGTON -- In the wake of the nations's economic meltdown, financial literacy and financial consumer protections have taken on an urgency in the Obama White House. On Tuesday, Obama's new Advisory Council on Financial Literacy was launched at a meeting chaired by Jonathan Rogers with fellow Chicagoans, White House senior advisor Valerie Jarrett and Public Engagement chief Tina Tchen at the table.

"There was a consensus that we work with younger people and get people exposed to all the issues around financial literacy at younger ages," Rogers told me after the meeting at the Treasury Department. "Not only does it make them better investors and savers when they get older, but their parents and their aunts and their uncles can learn from the young people."

Rogers has long been involved in financial literacy issues, working with disadvantaged youth at the Chicago Public School he founded, the Ariel Community Academy in Kenwood. The Rogers panel replaces a commission created by President Bush in 2008.

As the U.S. regulatory system was failing, people got themselves into jams by agreeing to expensive loans that set them up for financial failure. The Obama White House pushed legislation that created the Consumer Financial Protection Bureau, being established by White House advisor Elizabeth Warren.

As part of a new national strategy on financial literacy--unveiled Tuesday by the Financial Literacy and Education Commission, the Rogers and Warren panels will have overlapping missions.

While a push for financial literacy is on Rogers agenda--knowing the basics of earning, spending, saving, investing and borrowing--part of Warren's job, Tchen noted is to make sure the "level they need to be literate is not being a lawyer and a financial planner."

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6 Comments

Sometimes the lack of financial literacy is a function of the complexity of financial information itself. The term "financial literacy" points to only one side of the equation: literacy is not just the ability of the reader/user to understand the information and be able to function well within financial contexts. It also is the need for those who create financial information to do so in a manner that makes it easy for readers/users to understand and use the information. Both the user of financial information and the creator of financial information are responsible for financial literacy.

I think that financial literacy is very important because as we emerge into adulthood we need at the very minimum basic skills about the inner workings of our monetary system. I also believe it's imperative that we involve public/private entities so the very best resources are marshalled toward acheiving the goal of a more informed consumer. I think that companies should provide quarterly volunteer programs to their employees so that they make choices with their retirement plan choices. I once asked a lady why she chose a particular Mutual Fund and her answer was it sounded good. That type of apathy can lead to disasterous consequences...

Financial literacy, true financial literacy, is the ability to see the implications of ones decisions, weigh ones values, and then commit to a direction with informed expectation of the desired result.